Staying safe in the booming blockchain and GameFi world

Hoang Viet Tien-Head of Strategic Advisory, Insider

Mobile games and e-sports account for a major share of the blockchain sphere, and in addition to the play-to-earn wave from blockchain games, new waves are coming such as SocialFi (earning income through social activities), CALO (exercise to collect utility tokens), and Genopets (nurture and evolve Genopes to train and battle for rewards).

A new report by DappRadar and the Blockchain Game Alliance suggests that 2022 will be a benchmark year for crypto games developers.

The report reveals that $2.5 billion in investments were raised in Q1 alone this year, adding that developers could see this figure balloon to $10 billion by the end of the year. Compared to previous years, these figures also suggest the niche has become a key sector for investors. In 2021, for example, just $4 billion was raised throughout the whole year.

In Vietnam, there are about 3.99 million gamers and more than 60 per cent are between the ages of 18 and 30. The number of online game players in Vietnam has increased dramatically, with an increase of 40 per cent in the number of mobile game downloads around Lunar New Year 2020 compared to the same period in 2019, according to Vietnam Briefing.

Axie Infinity is deemed the populariser of the term GameFi since its peak in mid-2021. Since then, the concept has gradually attracted more attention to the gaming and blockchain community, as well as a lot of buzz to Vietnam.

But the game’s owners announced a record crypto theft on its platform in March and forced them to block the withdrawal of gamers to control the situation. While this solution disappoints many gamers, in fact, the player count of this hit game has plummeted since before this hack took place.

According to a report by Sky Mavis, owner of Axie Infinity, the daily player count of this game has dropped by 45 per cent from the peak of November, to only 1.48 million per day. The latest figures were recorded in the last week of March, just one day before the $600 million hack was discovered.

Axie Infinity is just one example for the attacks on the security systems of blockchain platforms. According to a report from CertiK – a company specialising in blockchain security – in April there were at least 31 hacker attacks stealing cryptocurrencies worth more than $370 million. Hackers have exploited vulnerabilities in the protocols of projects or tricked users into taking over accounts, which is commonly referred to as phishing.

Ultimately, there is no technology that is fully secure. Every technology is created, operated, exploited, and used by people, which usually creates path to vulnerabilities. Thus, users of cryptocurrency games and projects can become the fastest way for hackers to infiltrate and appropriate assets.

Looking at the loss figures, hackers are increasing attacks on blockchain projects because of the possibility of stealing large amounts of money. Many blockchain projects, decentralised finance platforms, cryptocurrency projects, and related services in this mushrooming period are not paying much attention to security issues and are thus becoming lucrative bait for hackers.

According to CertiK, in 2021 hackers stole more than $1.3 billion in total cryptocurrency. Meanwhile, only in the first four months of 2022, hackers have attacked and stolen more than $1 billion worth of cryptocurrencies.

The challenge in security with blockchain projects also comes from the product development process and investment in project personnel. In addition, projects often want to do things that can create immediate benefits for the product and the community, so there are not many human resources for security.

A number of projects are now building their own blockchain, with a team with a decent level of ability. At the same time, this helps to reduce transaction fees, reduce latency, and increase the reputation of the project.

However, they also have potential risks if resources for security are not fully funded. Some in the group may become greedy when seeing billions of dollars in assets, posing risks to judgments. Therefore, in the early stages, some projects often ignore this factor to focus on perfecting the product.

One of the solutions offered is that companies can cooperate with partners specialising in security to reevaluate systems, applications, smart contracts, server infrastructure, and operating procedures. Recent hacks are a driving factor for projects that need to pay more attention to system security. Over time, the surviving blockchain projects in the near future will gain quality and be more concerned with feature development, community, and security.

In addition, demand for human resources will increase. Programming training organisations need to embrace this trend so that we can have the staff to supply the market.